Enterprise Products Partners LP cited robust growth in Eagle Ford Shale liquids-rich gas production in South Texas as the rationale behind its plans to add yet more fractionation capacity at the Mont Belvieu, TX, natural gas liquids (NGL) complex.
The partnership said Monday it plans to construct a sixth NGL fractionator at its Mont Belvieu facility to increase capacity there by 75,000 b/d. The project follows recent similar expansions by the partnership and joins multiple other projects for the "Henry Hub" of NGLs as producers increasingly turn to liquids-rich gas to lift their bottom lines.
The facility would accommodate liquids-rich gas from the Eagle Ford. Enterprise said it has obtained approvals that will allow it to begin construction of the facility, which is projected to begin service in early 2013. At that time Enterprise would have the capability to fractionate more than 450,000 b/d of NGLs at Mont Belvieu. Systemwide, the partnership's net fractionation capacity would increase to more than 780,000 b/d.
"The announcement of our third [new] fractionator at Mont Belvieu in less than two years is yet another indication of the robust demand for Enterprise's midstream services to handle increased natural gas production from the expanding shale plays," said Jim Teague, COO of Enterprise's general partner.
"As with our fifth Mont Belvieu fractionator -- which is currently under construction and scheduled to be completed in the fourth quarter of 2011 -- the sixth unit is expected to be fully contracted when it begins service. The additional capacity at Mont Belvieu will give us the capability to handle approximately 75,000 b/d of mixed NGLs currently being diverted to Louisiana for fractionating, as well as an incremental 30,000 b/d of y-grade from the Phase II expansion of our Yoakum processing facility in Lavaca County, TX."
Last December Enterprise's fourth Mont Belvieu fractionator begun operating ahead of schedule and under budget at its nameplate capacity of 75,000 b/d (see Daily GPI, Dec. 1, 2010).
Also in the Mont Belvieu NGL game, ONEOK Partners LP recently said it plans to spend $910 million to $1.2 billion between now and late 2013 on new infrastructure, including new fractionation at Mont Belvieu (see Daily GPI, May 4). Energy Transfer Partners LP (ETP) and Regency Energy Partners LP also said their Lone Star NGL LLC joint venture would construct a 100,000 b/d NGL fractionation facility at Mont Belvieu (see Daily GPI, May 6). Last October Gulf Coast Fractionators -- a partnership of ConocoPhillips, Devon Energy Corp. and Targa Resources Partners LP -- said it would expand its Mont Belvieu fractionation facility by 43,000 b/d (42%) to 145,000 b/d (see Daily GPI, Oct. 12, 2010).
Activity in the Eagle Ford Shale continues at a brisk pace, Enterprise said. According to NGI's Shale Daily Unconventional Rig Count, 189 rigs were active in the play as of last week. While that's a 3% decline from the previous week, it is still 115% above the year-ago rig count in the Eagle Ford.
According to Enterprise, more than 900 wells are on production in the Eagle Ford with about 1,400 additional wells in various stages of drilling and completion. Current production from the play is estimated by the partnership at 850 MMcf/d of gas and 140,000 b/d of crude oil and condensate.
"Using recently built Enterprise fractionators as a template and utilizing existing infrastructure should promote greater efficiency in the design, construction and operation of the sixth fractionator," Enterprise said.
"From a demand perspective, a persistent and significant differential between natural gas and crude oil prices continues to favor NGLs over heavier crude oil derivatives as feedstocks for the petrochemical industry," Teague said. "Petrochemical facilities have responded with announcements of planned new construction or modifications to make greater use of NGL feedstocks. In the last 12 months alone, approximately 100,000 b/d to 150,000 b/d of heavy cracker feedstocks have been replaced with light-end feedstocks."
In March Enterprise said it would expand its NGL import/export terminal on the Houston Ship Channel (see Daily GPI, March 30) to nearly double the fully refrigerated export loading capacity for propane and other NGLs to more than 10,000 b/hour, while enhancing its ability to load multiple vessels simultaneously. The project is expected to be completed in the second half of 2012.